My grandfather loved to gamble. He taught me card games and how to play craps well before I was old enough to gamble myself. However, he as also adamant about telling me to never ever ever gamble with the “house money”. That is, don’t ever risk the money that you simply can’t afford to lose. That lesson has stuck with me and even despite the fact that I live in Las Vegas I very rarely gamble.
Recently I’ve seen some pretty sad headlines about people who bet huge portions, or in some cases all, of their retirement savings on very risky “investments”. Most of them recently had to do with cryptocurrencies. I’m not going to pass judgement on cryptocurrencies as an investment, but I do believe that betting everything or most of what you have worked and saved for on anything risky is deeply foolish. Certainly a portion of your investment capital should be allocated for some speculative investments, but that portion should be small. Approximately 5% is a reasonable amount. Anything more than that and you better be doing your research and homework so that you understand what you are truly doing and in what you are actually investing. Otherwise, just as the batter that is purposely swinging to hit run is most likely to strikeout, these risky investments are likely to result in a loss. Make sure the “house money” is not what is being lost.
Patient and Disciplined Saving 